Let’s start with a review of Chapter 13, via some multiple choice
exercises.
Competition should eliminate
discrimination because:
a. good companies always win out
over bad companies
b. companies who discriminate will be boycotted by consumers
c. companies who don't discriminate will have higher worker
morale
d. companies who don't discriminate should be able to hire
workers of equal productivity for a lower wage and therefore earn
higher profits
The correct answer is d.
When a market has only a single buyer it
is a ___________:
a. monopoly
b. monopolistic competitor
c. customer
d. monopsony
e. monopsonistic competitor
The correct answer is d.
In "winner-take-all" markets,
a. there is only one available
worker
b. small differences in human capital translate into large pay
differences
c. high wages are given to the worker with the highest marginal
productivity
d. the most competitive firm hires all qualified workers
e. wages are lower than in other markets
The correct answer is b.
Chief executive officers are paid on
average about 1000 times what ordinary workers are paid because
a. they operate in
winner-take-all markets
b. their compensation is set by corporate boards who have a
personal stake in setting high CEO salaries
c. the value of their leadership is difficult to measure
d. many of them have MBAs and years of experience
e. all of the above
The correct answer is e.
The textbook emphasizes point a. I
believe that point b is more important.
If a job pays a higher wage because it
requires the worker to work in unpleasant working conditions, the worker
is receiving
a. workers compensation
b. a wage premium
c. a fringe benefit
d. a compensating wage differential
e. what they deserve
The correct answer is d.
Chapter 14 provides an overview of the
following public policy issues:
how to deal with "natural
monopolies"
how to price publicly provided services
how best to provide health insurance
how best to discourage pollution
I will cover the first two of these
issues today, focusing on the following Powerpoint slides:
14-3
14-4
14-6
14-9
14-11
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